Leasehold Improvements

What are Leasehold Improvements?

Leasehold improvements are defined as the customized alterations or improvements a building owner makes to a leasing space as part of the commercial lease agreement. Also known as Tenant Improvements, these alterations could be completed by the landlord as a way to attract tenants, or completed by the tenant themselves. Leasehold improvements generally include activities that can be easily removed upon leaving the premises, such as changing the flooring, painting the interior or exterior of the building, installing wall partitions and more. If the tenant is doing the improvements, they may be paid for by the landlord through what’s known as a Tenant Improvement Allowance (TIA). In this type of agreement, the tenant would usually have control over the improvements and the landlord would set a total budget for the improvements. The cost for these improvements would be broken down over the course of the lease payments. If the tenant goes over budget they must pay for any extra expenditures themselves.

Landlords may sometimes offer rental discounts for lease improvements in order to help offset the costs of the improvements by the tenant.

Leasehold Improvements: Get it in Writing

Leasehold improvements are very common clauses in commercial lease agreements, as it is rare for a tenant to find the perfect space as is, and nearly anything a tenant installs in the premises is a leasehold improvement. Both tenants and landlords should be careful to include any and all leasehold improvements in the lease agreement from the start, and include any possible future rental increases once the improvements are paid for. It is highly advised that landlords and tenants seek the assistance of a commercial real estate agent when discussing leasehold improvements to ensure all the details are clearly included in the document to avoid confusion.

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What Our Clients Are Saying

I would like to take this opportunity to thank you for helping us secure our new office premises. Your professional expertise and attention to detail made finding new office space a pleasurable experience.

Your understanding of the landlord’s lease and what the landlord’s giving points were helped our firm secure very favourable lease terms. We are confident that you represented our firm’s best interest throughout the entire process.

Your knowledge of the office market saved us money! The recommendation of asking for a free rent period directly helped our firm save a significant amount of money to off-set our moving costs.

Without hesitation, I would recommend your leasing services to my clients, friends and business associates.

Robert B. Ramsay

President, Vantage Engineering Inc.

ACM Automation used John Savard’s services for our office lease renewals in 2003 & 2008. In both negotiations, we did not want to move and were concerned that our landlord would use that against us. John was able to present market comparable alternatives to the landlord so the landlord now had to compete against its competition to earn our tenancy. I strongly feel that John’s involvement created the leverage that ACM Automation required to secure ACM favourable lease terms.

In the fall of 2011, ACM Automation needed to expand our business. A simple solution presented itself as there was vacant space in our building. Expansion in our building seemed easy as we still had 2 years left on the lease that John had negotiated 3 years prior. We thought we had a solution figured out in our direct discussions with our landlord’s agent but I called my trusted real estate broker for his opinion. John advised us on the office market. It seemed to be a reasonable solution to expand in our building given the limited recoveries that we could achieve in the current Sublease market that would make a move too costly.

Trish Bingam

Owner, ACM Facility Safety

John has been my office space advisor for over 7 years now. His initial role was vital in relocating to our previous location 5 years ago.

In our most recent relocation, our company growth plans crated uncertainty over just how much more office space we would require and therefore crated a delay in our ability to make a timely decision. This delay challenged our search choices such that only a few options existed.

Our search parameters were also limited by location. Our firm’s business requires our location to be close to both City Hall and major transportation arteries such as the Memorial Drive and Deerfoot Trail. John was able to increase the set of office location options by recommending a building in the west end of downtown. I trusted johns’ knowledge of our new building’s ingress and egress of traffic. I have since discovered that John’s recommendation has saved our firm a significant amount of travel time.

John successfully navigated our limited choices and was able to successfully negotiate a very favourable lease for our firm in a location that has turned out better than I would have thought. John’s knowledge of the Landlord’s Lease revealed the giving points that provided us the comfort of a lease that would protect our firm.

Without Hesitation, I would recommend John Savard’s office leasing services to my friends and colleagues.

Greg Brown

Brown & Associates Planning Group

John has been our trusted source for the last twelve years, and our last three office locations. He is incredibly knowledgeable and helped us get a prime location that exceeded our expectations.

John takes the pain out of an office move, without a doubt I would recommend working with BedRock Realty.